Chris Ferguson is a monster (1 Viewer)

[Lemonzest]

When you are a director of a company receiving millions of dollars, ignorance is not an excuse. To my mind that’s just as bad.

I am not saying he was ignorant. They should not have used players deposits for other things like sponsorships and advertising.

But if the DOJ had left them alone everything would have been fine Many companies push the limits and run up some amount of debt in the hopes of bringing their brand to the next level. I am no expert on the situation but this sounds like what happened. The questionable practice of using players funds was sustainable and the brand was a powerhouse.

The DOJ just ruined them as they were stretched too thin financially.

 

[Highli99]

I believe it was an intentional act to commingle player funds and operating funds. I believe it was done because operating costs exceeded operating revenue and the player funds were seen as a cheap (ie free) source of borrowing. I suspect the actions were rationalized by the expectation of future profitability. It was able to persist for awhile due to the fact that most of the deposited money ended up in the accounts of good players who left a lot of it sitting there. When the government stepped in and cut off deposit sources, the Ponzi scheme imploded and we ended up with Black Friday.

I find it very hard to believe that Jesus and the Professor did not know about the commingling. I think they just rationalized it and did not expect the government to make deposits so difficult.

The fact is a lot of people were hurt and they had some level of responsibility. If the government had clear evidence they would have prosecuted. Not sure what justice looks like now but my personal decision is to move on.

 

[joepro]

I don't think Jesus Ferguson is a saint (pun intended) but the players had to know the risks of such an operation. It's like if you were playing in an illegal house game and the game got robbed or the cops busted it. There was no way to make the players whole and it was a bad situation all around. Now if I did have a lot of money on the site, my opinion of these guys would probably be a lot worse.

 

[Lemonzest]

I believe it was an intentional act to commingle player funds and operating funds. I believe it was done because operating costs exceeded operating revenue and the player funds were seen as a cheap (ie free) source of borrowing. I suspect the actions were rationalized by the expectation of future profitability. It was able to persist for awhile due to the fact that most of the deposited money ended up in the accounts of good players who left a lot of it sitting there. When the government stepped in and cut off deposit sources, the Ponzi scheme imploded and we ended up with Black Friday.

I find it very hard to believe that Jesus and the Professor did not know about the commingling. I think they just rationalized it and did not expect the government to make deposits so difficult.

The fact is a lot of people were hurt and they had some level of responsibility. If the government had clear evidence they would have prosecuted. Not sure what justice looks like now but my personal decision is to move on.

I agree that Howard and Jesus probably knew how the funds were being used. It is possible they didn't know but likely they were aware that players funds were being used for other things.

IMO there is a huge distinction between someone who intentionally scams people and someone who runs a legitimate business but gets into financial trouble. Every business that goes bankrupt will end up hurting people. As I said above I think these are sly business people and good poker players but not malicious. They are probably mad at how the whole thing went down as well. They lost their profitable business and reputation all in one fell swoop. My guess is their intention was to keep running a profitable business and not have any problems. Their mistakes hurt themselves as much as anyone else.

I am not nut hugging these guys but just trying to provide a more balanced point of view on the situation. Everyone in the poker world unanimously thinks they are scum but its more complicated then that. IMO someone who actively cheats at poker is way worse and on a completely different (lower) level than these guys.

 

[Darson]

Many businesses run like this, especially early on in operations. The company takes on debt to make compensation payments to directors since they don't have the cashflow to make these payments when they're just starting but the directors want to see rewards immediately. Often this is done to keep the directors onboard - if you hire a celebrity to be the "face" of your venture then you need to pay them otherwise they'll leave.

If the company is successful, they pay back their borrowings and no one cares. If the company folds, the directors have their money and the creditors get screwed.

In this case, the directors weren't borrowing money from a bank because they had the cashflow to make payments to themselves using the float. The company went under and as before, the directors have their money and the creditors get screwed.

 

[Lemonzest]

Many businesses run like this, especially early on in operations. The company takes on debt to make compensation payments to directors since they don't have the cashflow to make these payments when they're just starting but the directors want to see rewards immediately. Often this is done to keep the directors onboard - if you hire a celebrity to be the "face" of your venture then you need to pay them otherwise they'll leave.

If the company is successful, they pay back their borrowings and no one cares. If the company folds, the directors have their money and the creditors get screwed.

In this case, the directors weren't borrowing money from a bank because they had the cashflow to make payments to themselves using the float. The company went under and as before, the directors have their money and the creditors get screwed.

At the time the two big names were Poker Stars and Full Tilt. I am speculating here but I think there was likely a race to be the eminent online poker site. Both sites wanted to sponsor all the celebrities and poker pros to elevate their brand and in turn draw more traffic.

FT was paying insane amounts of money to Ivey and Dwan (and others) during the poker boom to keep them on board and those big names kept the public interested.

Without having poker pros on the FT team that site would have never reached the same levels of popularity. Just railing those high stakes online games back in the day was crazy.

 

[Old State]

I always hated that guy for no other reason than he wore that dumb hat and glasses. It’s one thing for a guy like Doyle Brunson and Amarillo Slim to where one, but on Ferguson it just looks like cheesy poker shtick. I mean he is from freaking Los Angels CA not Abaline TX!

Total fraud.

His natural look is probably closer to this

 

[BGinGA]

You cannot use my photo publicly without permission, sir.

 

[Forty4]

Isn’t this how banks operate? They take your deposits and invest them in other ways, one of those investments might be compensation. They just have the luxury of having the FDIC if things go south.

Sure it’s an oversimplification but sure that’s the line they got. Without the last line.

 

[upNdown]

I always hated that guy for no other reason than he wore that dumb hat and glasses. It’s one thing for a guy like Doyle Brunson and Amarillo Slim to where one, but on Ferguson it just looks like cheesy poker shtick. I mean he is from freaking Los Angels CA not Abaline TX!

Total fraud.

His natural look is probably closer to this

Better than another freak in a scarf. We need colorful looking players at the table. I suppose it's cheesy poker schtick, but the guy has 6 bracelets, so I think he can get away with whatever schitck he wants.

 

[RocAFella1]

Better than another freak in a scarf. We need colorful looking players at the table. I suppose it's cheesy poker schtick, but the guy has 6 bracelets, so I think he can get away with whatever schitck he wants.

The whole "covering up the neck" so as to not give off tells from pulsating veins drives me crazy.

 

[bivey]

The whole "covering up the neck" so as to not give off tells from pulsating veins drives me crazy.

You and I will not get along.

 

[RocAFella1]

You and I will not get along.

Ha! Do you give off neck tells? I guess I'm just thinking that pretty soon everyone will just go full unabomber at the table.

But to each his own I guess!

 

[Old State]

My new poker outfit. No tells for you!

 

[Highli99]

Ha! Do you give off neck tells? I guess I'm just thinking that pretty soon everyone will just go full unabomber at the table.

But to each his own I guess!

I think when your carteroid artery is thumping visibly it either means you are bluffing or have the nuts.

 

[RocAFella1]

I think when your carteroid artery is thumping visibly it either means you are bluffing or have the nuts.

Pretty good range merging there.

 

[bivey]

My pulse goes crazy in just about every pot.

 

[Frogzilla]

There is a huge difference in taking on debt from a bank or other creditor who can expect, measure, and price the risk they are exposed to...versus taking on “free” debt from unwilling customers. Using player funds for anything other than cashouts is completely ridiculous and unacceptable. Ferguson is a piece of shit.

 

[UKS]

They made two common dodgy business errors. Mixing personal with business funds, and mixing client with business funds.

This didn't matter when they were making lots of profit, but mattered when the profit started dropping and killed them when the sites were seized.

There didn't seem to be active *deliberate* embezzlement on their part. (Though others maybe this would be true. I cannot remember the details of the case) More a lack of financial controls that happen when you put professional risk takers in charge of something that requires great discipline.

A lot of businesses (banks) do not have the funds held in the back to cover their full losses.

 

[Seeking Alpha Social Club]

A

Can someone explain what exactly Lederer and Ferguson did?

Not that it makes what they did right, but it looks like most people got paid back. @Burke, here's the latest information I could find from the Justice Department.

"The FTP Claims Process was announced in March 2013 and is winding down. GCG received and reviewed 53,220 claims submitted by U.S. Full Tilt fraud victims during the claims period. To date, 44,320 claims have been approved for payment and approximately $118,116,918.04 has been paid to U.S. Full Tilt fraud victims."

https://www.justice.gov/usao-sdny/p...es-compensation-program-absolute-poker-victim

 

[Anthony Martino]

I think this is a case of the guys running Full Tilt and believing they had stumbled upon a never-ending supply of funds that would just keep flowing, so they felt like they could overdraw money and it would be made up in the future by additional player action.

I think Ferguson made something like 60+ million from the sites operation if I recall correctly.

I don't think their intent was malicious, they just fucked up and had already overspent player funds by the time it was too late to reverse course.

That being said, his apology was terrible and I don't think he should be welcomed back with open arms either.

 

[Nimrodscall]

He probably hangs out with Lance Armstrong.

 

[abby99]

A

Not that it makes what they did right, but it looks like most people got paid back. @Burke, here's the latest information I could find from the Justice Department.

"The FTP Claims Process was announced in March 2013 and is winding down. GCG received and reviewed 53,220 claims submitted by U.S. Full Tilt fraud victims during the claims period. To date, 44,320 claims have been approved for payment and approximately $118,116,918.04 has been paid to U.S. Full Tilt fraud victims."

https://www.justice.gov/usao-sdny/p...es-compensation-program-absolute-poker-victim

Let's remember that Poker Stars paid the FTP claims, not the FTP slimeballs.

Ferguson et al pulled out more cash than what was being generated by operations. I really don't believe that they didn't know what was going on. Most likely (IMO), their greed blinded them to reality.